Mercari (4385) AI Stock Analysis

• Market Cap: ¥418.22B
• Dividend Yield: N/A
• Average Volume (3M): 4.69M
• Price to Earnings (P/E): 25.4
• Beta (1Y): 0.77
• Revenue Growth: 3.01%
• EPS Growth: -2.84%
• Country: JP
• Employees: 2,080
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Specialty Retail
• EPS (TTM): 26.47
• Shares Outstanding: 164,395,130
• 10 Day Avg. Volume: 4,883,640
• 30 Day Avg. Volume: 4,687,760
• PEG Ratio: -0.55
• Price to Book (P/B): 8.36
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -47.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥2,712.50
• Price Target Upside: 6.62% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 75 Outperform
• Price Target: ¥2,802.00 ▲(10.14%Upside)

Mercari's overall stock score is driven by strong financial performance and positive technical indicators. Its profitability and growth metrics are robust, and the stock shows bullish technical momentum. However, the valuation is moderate, and operational cash flow generation needs improvement.

Mercari Business Overview & Revenue Model

Company Description

Mercari, Inc. engages in the planning, development, and operation of the Mercari marketplace applications in Japan and the United States. Mercari, Inc. was incorporated in 2013 and is based in Tokyo, Japan.

How the Company Makes Money

Mercari generates revenue primarily through transaction fees collected from sales made on its platform. When a user successfully sells an item, Mercari charges a commission fee, which is a percentage of the item's sale price. This fee structure incentivizes more transactions and higher-value sales. In addition to transaction fees, Mercari may also earn revenue from shipping services, as it offers integrated shipping solutions to facilitate the delivery of items sold through its platform. Furthermore, Mercari may explore partnerships and advertising opportunities to bolster its revenue streams, though its primary income is derived from the fees associated with marketplace transactions. The company's growth and profitability are significantly influenced by user engagement, transaction volume, and the expansion of its user base in its operating markets.

Mercari Financial Statement Overview

Summary

Mercari demonstrates strong financial performance, with robust profitability and growth. The income statement shows good margins and steady revenue growth. The balance sheet is stable, with manageable debt levels, while cash flows indicate recovery but require improvement in operational cash generation.

Income Statement

Mercari has shown a solid performance in its income statement metrics. The TTM (Trailing-Twelve-Months) gross profit margin is strong at 70.9%, indicating efficient cost management relative to revenue. The net profit margin improved to 8.6%, reflecting increased profitability. The revenue growth rate from the previous year is 1.7%, indicating steady growth. The EBIT and EBITDA margins are notable at 13.2% and 14.3%, respectively, showcasing operational efficiency. Overall, the income statement reflects healthy profitability and growth, with room for further revenue expansion.

Balance Sheet

The balance sheet of Mercari demonstrates a stable financial position. The debt-to-equity ratio is 2.14, suggesting moderate leverage but well within a manageable range. The return on equity (ROE) stands at 19.4%, highlighting effective use of equity to generate profits. The equity ratio is relatively low at 16.2%, indicating a higher reliance on liabilities to finance assets. While the company maintains a strong cash position, improving the equity ratio could enhance financial stability.

Cash Flow

Cash flow metrics for Mercari present a mixed picture. The free cash flow growth rate reflects a significant recovery from previous negative levels, indicating improved cash generation. The operating cash flow to net income ratio is 0.17, suggesting that operating cash generation needs enhancement relative to profits. However, the free cash flow to net income ratio of 0.15 underscores a positive trend in converting earnings into free cash flow. Focus on strengthening operational cash flows could improve the cash flow position.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
190.60B	187.41B	171.97B	147.05B	106.11B	76.28B
	Gross Profit
135.15B	129.73B	114.42B	95.14B	81.80B	55.61B
	EBIT
25.16B	18.87B	17.02B	-3.71B	5.18B	-19.31B
	EBITDA
27.22B	20.42B	17.96B	-3.04B	13.06B	-18.63B
	Net Income Common Stockholders
16.44B	13.46B	13.11B	-7.57B	5.72B	-22.77B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
183.74B	197.31B	202.05B	211.41B	171.46B	141.01B
	Total Assets
523.10B	501.77B	415.29B	339.86B	262.53B	198.01B
	Total Debt
181.33B	193.31B	157.53B	131.35B	71.15B	52.45B
	Net Debt
-2.41B	-2.45B	-38.74B	-80.06B	-100.31B	-83.30B
	Total Liabilities
438.11B	429.63B	360.06B	301.87B	222.52B	162.65B
	Stockholders Equity
84.70B	71.84B	54.67B	37.68B	39.63B	34.78B
Cash Flow		Free Cash Flow
2.49B	-43.49B	-37.35B	-26.89B	2.95B	11.76B
	Operating Cash Flow
2.86B	-43.34B	-36.88B	-26.22B	3.37B	12.53B
	Investing Cash Flow
-1.32B	-877.00M	-601.00M	-671.00M	6.91B	-2.65B
	Financing Cash Flow
-3.30B	32.09B	25.17B	62.06B	19.77B	465.00M

Mercari Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2544.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4385, the sentiment is Positive. The current price of 2544 is above the 20-day moving average (MA) of 2404.18, above the 50-day MA of 2330.69, and above the 200-day MA of 2205.66, indicating a bullish trend. The MACD of 53.83 indicates Negative momentum. The RSI at 62.71 is Neutral, neither overbought nor oversold. The STOCH value of 67.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4385.

Mercari Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4385	75 Outperform	¥418.22B	25.38	21.33%	―	3.01%	-2.84%
Sector *	63 Neutral	$6.96B	11.51	2.80%	3.85%	2.70%	-24.43%
RKUNF		$12.18B	―	-22.97%	―	―	―
MONOF		$9.65B	38.85	28.00%	0.87%	―	―
SATLF		$9.59B	32.49	48.74%	2.18%	―	―
3964	69 Neutral	¥75.07B	14.06		2.53%	29.11%	8.08%
7685	61 Neutral	¥82.78B	24.55		0.53%	56.13%	124.78%

Mercari Corporate Events

Mercari Reports Strong Profit Growth Amid Modest Revenue Increase

Mercari, Inc. reported its consolidated financial results for the nine months ending March 31, 2025, showing a modest increase in revenue by 2.3% compared to the previous year. The company achieved significant growth in core operating profit and operating profit, with increases of 48.7% and 58.9% respectively, indicating improved operational efficiency. The financial position of the company also strengthened with an increase in total assets and equity, reflecting a stable financial outlook. Despite the positive financial performance, the company maintained a policy of not issuing dividends for the fiscal year.